In recent months, authorities have implemented significant fiscal adjustment measures, including reforms of energy prices. Gasoline prices have been raised by nearly 60 percent, while prices of diesel, kerosene, natural gas, and electricity and water tariffs are being adjusted gradually over the medium term. Tobacco and alcohol taxes have been increased.

In 2016 and 2017, growth is expected to slow further on account of the fiscal adjustment and weaker investor sentiment. Inflation is expected to rise modestly in 2016 with the increase in energy prices, and ease over the medium term with weak economic activity containing the pass-through to wages. Despite the implementation of fiscal measures, lower oil prices imply that the fiscal deficit is projected to reach 19.5 percent of GDP in 2016 and remain high over the medium term. The current account deficit is projected to reach over 8 percent of GDP in 2016 and narrow gradually. Financial outflows are expected to continue.